Global Warming Alarmism – Are the Polar Ice Caps Melting?

January 14, 2012 · Posted in Environment · 2 Comments

My favorite part in an interesting article titled Are the Polar Ice Caps Melting?:

Perhaps the most significant factor to consider is the following report (excerpted) from the federal National Oceanic and Atmospheric Administration’s (NOAA) American consul at Norway, George Ifft:

The Arctic seems to be warming up. Reports from fishermen, seal hunters, and explorers who sail the seas about Spitzbergen [an island 12 degrees south of the North Pole – ed.] and the eastern Arctic, all point to a radical change in climatic conditions, and hitherto unheard-of high temperatures. In fact, so little ice has never before been noted. The warmth of the waters makes it probable that the favorable ice conditions will continue for some time.

Many old landmarks are so changed as to be unrecognizable. Where formerly great masses of ice were found, there are now often accumulations of earth and stones. At many points where glaciers formerly extended far into the sea they have entirely disappeared. The change in temperature has also brought about great change in the flora and fauna of the Arctic. There were few [white fish and] seal in Spitzbergen waters this year, and last winter the ocean did not freeze over even on the north coast. With the disappearance of white fish and seal has come other life in these waters. This year herring in great shoals were found along the west coast. Shoals of smelt were also met with.

Ifft’s report appeared in NOAA’s Monthly Weather Review of November 1922. Whatever caused the “favorable conditions” in 1922, it is certain man-made greenhouse gases had nothing to do with it, and the rest of the world went on with the political and cultural revolutions of the 1920s without noticing any catastrophic climate change.

Tags: global warming

Who Understands Debt?

January 3, 2012 · Posted in General Economics · 1 Comment

I’ll be commenting on the following statements, posted by a writer on the New York Times in a blog post titled Nobody Understands Debt:

Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see America as being like a family that took out too large a mortgage, and will have a hard time making the monthly payments.

This is, however, a really bad analogy in at least two ways.

First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.

Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves.

This was clearly true of the debt incurred to win World War II. Taxpayers were on the hook for a debt that was significantly bigger, as a percentage of G.D.P., than debt today; but that debt was also owned by taxpayers, such as all the people who bought savings bonds. So the debt didn’t make postwar America poorer. In particular, the debt didn’t prevent the postwar generation from experiencing the biggest rise in incomes and living standards in our nation’s history.

But isn’t this time different? Not as much as you think.

It’s true that foreigners now hold large claims on the United States, including a fair amount of government debt. But every dollar’s worth of foreign claims on America is matched by 89 cents’ worth of U.S. claims on foreigners. And because foreigners tend to put their U.S. investments into safe, low-yield assets, America actually earns more from its assets abroad than it pays to foreign investors. If your image is of a nation that’s already deep in hock to the Chinese, you’ve been misinformed. Nor are we heading rapidly in that direction.

Now, the fact that federal debt isn’t at all like a mortgage on America’s future doesn’t mean that the debt is harmless. Taxes must be levied to pay the interest, and you don’t have to be a right-wing ideologue to concede that taxes impose some cost on the economy, if nothing else by causing a diversion of resources away from productive activities into tax avoidance and evasion. But these costs are a lot less dramatic than the analogy with an overindebted family might suggest.

And that’s why nations with stable, responsible governments — that is, governments that are willing to impose modestly higher taxes when the situation warrants it — have historically been able to live with much higher levels of debt than today’s conventional wisdom would lead you to believe. Britain, in particular, has had debt exceeding 100 percent of G.D.P. for 81 of the last 170 years. When Keynes was writing about the need to spend your way out of a depression, Britain was deeper in debt than any advanced nation today, with the exception of Japan.

Of course, America, with its rabidly antitax conservative movement, may not have a government that is responsible in this sense. But in that case the fault lies not in our debt, but in ourselves.

So yes, debt matters. But right now, other things matter more. We need more, not less, government spending to get us out of our unemployment trap. And the wrongheaded, ill-informed obsession with debt is standing in the way.

But the government HAS been running deficits!

This just as a sidenote:

Actually the US government is, has been, and is planning to continue to be running record deficits above $1 trillion:

The total public debt has more than tripled since 2000!

So technically, according to this guy it should all be good, right?

Any serious scientist proposes a null hypothesis.

What’s his null hypothesis?

How much longer should the government follow his policy recommendations before he’ll stop and wonder if
maybe they are aggravating and prolonging the economic crisis in the US?

How much did all this debt help rid the US of unemployment? Didn’t unemployment rather rise alongside the debt? In spite of corroborating data like that, I’m not even claiming that there necessarily is a direct correlation. But the author above obviously claims that there is a correlation in the other direction. If he thinks so, wouldn’t it make sense to have a curious and open discussion about such contradicting data, if he were serious in his pursuit of the truth?

Is it not at least reasonable food for thought to propose the that the public debt doesn’t seem to be a cure against unemployment, that maybe the problem needs to be tackled elsewhere?

Anyway …

What are the problems with the public debt?

The author conveniently picks all the wrong amateur arguments against the public debt to shoot down, and ignores the accurate ones.

The problem with the public debt as I see it, is that, even if “we” were completely indebted to “ourselves” (note the grade A sophistry in such imprecise analyses), the working population is over time more and more on the hook to rich investors and politically connected bankers who just lean back and let the IRS collect for them.

While there may be some small retirees receiving interest payments (which is also unfair because those young people who will be funding their retirement never had any say in the matter), there is a significantly larger percentage of foreign and domestic big time investors who get to collect from people who never had a say in the debt they now need to pay off.

Just look at the Federal Reserve as one example. What do you think happens with all the revenue they earn from interest payments?

People like this author here will likely tell you “It’s all good because it’s all paid back to the Treasury”.

Well, that’s just pure and lazy sophistry!

What’s paid back to the Treasury is the Fed’s PROFIT, which is a more or less negligible sum after all the Fed’s board members, employees, contractors, partners in holding companies held by the Fed, and shareholders have been paid off.

Guess who the Fed’s shareholders are? It’s the big national banks, receiving a handsome preferred dividend every year.

And yes, they can rollover debt for as long as interest rates are low. I may note that I have consistently and correctly predicted record low Treasury rates for years to come. (Just by the by: I don’t know that the author above has ever made such a prediction, except when rates were already way low which doesn’t make it a prediction since it’s already happened. In fact he actually predicted sky rocketing rates and complete fiscal doom back in 2003 with the public debt at a third of today’s level, but then … it’s not like I ever expect consistency and sound methodology from biased academics on either side of the political aisle.)

All these low rates will do is allow the debt to get even more bloated. And interest rates won’t remain low forever, as you can see in Greece and similar situations. Did people like the above author see any of those sovereign debt crises coming?

What about Japan? Their debt is the most crushing of all industrialized nations, and I’m predicting that their time of low rates will be drawing to an end any day now, with their debt and pension crisis having entered its final stage. Then what?

They have been running deficits for two decades, people like this author ought to love what they did. Now what? … All you’ll hear is chirping crickets.

And then for someone like that to go on public record and say “Nobody understands debt.” – It’s embarrassing!

It’s the same old tired Keynesian paradigm: Debts don’t matter … until they do. And then it’ll most likely be too late.

Of course people like the above author may say: “But it’s just the rich who’re supposed to get taxed to pay off the debts.”

Yeah right, the rich people who bribe all the politicians in charge will let that happen, that’s the way of the world in the hazy deluded minds of state tenured academics … get real people!

For a more detailed analysis, read my post What’s the Problem With Government Budget Deficits?, I’ll just post its conclusion here:

As I explained, the ultimate damage caused by public budget deficits occurs at that point in time when taxpayers are forced to restrict their consumption and unjustly bear the cost of malinvestments from the past.

Ironically, when you look at the political stage, all you will hear in regards to “solutions” to deficits in the end, will for the most part be tax hikes. These are not solutions. They are the ultimate manifestation of the very problem at hand. They are, in fact, the precise opposite of a solution. Keep this in mind whenever you hear politicians talk about deficit solutions. Raising taxes to reduce deficits is absolutely and 100% an admission that one has completely failed to solve this deficit problem, and in fact laid the final brick that was missing in the very process of the public’s depredation via deficit spending.

A real solution would of course be to make investors suffer the consequences of their unproductive investments, default on the public debt, stop stealing money from people, and allow for voluntaryism to take the place of interventionism.

Tags: krugman, paul krugman, public debt, public debts

ACLU: “Obama will forever be known as the president who signed indefinite detention without charge or trial into law”; Why Obama’s Presidency Has Been a Great Success

January 2, 2012 · Posted in Government, Interventionism · Comment

The ACLU writes President Obama Signs Indefinite Detention Bill Into Law:

“President Obama’s action today is a blight on his legacy because he will forever be known as the president who signed indefinite detention without charge or trial into law,” said Anthony D. Romero, ACLU executive director. “The statute is particularly dangerous because it has no temporal or geographic limitations, and can be used by this and future presidents to militarily detain people captured far from any battlefield. The ACLU will fight worldwide detention authority wherever we can, be it in court, in Congress, or internationally.”

As I’ve argued since the beginning of the Obama presidency, the more disillusioned young people get with who they thought was for sure going to be their savior, the better it’ll be for the ideas of peace and liberty, and the more devastating it’ll be to the dying concepts of governments and nations in the long run.

Thus Obama’s election and tenure have indeed been a great success in helping push our ideas and we could have hardly asked for any more.

Tags: aclu, ndaa

Bitcoin / USD Finishes 2011 Up 1,473 Percent

January 2, 2012 · Posted in Monetary Economics · Comment

Bitcoin Money writes BTC/USD Finishes 2011 Up 1,473%:

The last trade for 2011 at the leading Bitcoin exchange was at the rate of $4.72 USD. For the year, Bitcoin’s exchange rate rose from $0.30 — a 1,473% increase. For the fourth quarter, the exchange rate dropped from $5.14 — an 8% decrease. For the month of December, the exchange rate rose from $3.06 — up 54% for the month.

The number of transactions where Bitcoins are used for both the transfer of funds and for commerce has not risen for the past quarter. The explanation for the exchange rate rise would seem then to be mostly attributed to a combination of short term speculation and the use of the currency as a store of value rather than it being due to organic demand from use as a trading currency. World financial events that have motivated investors towards previous metals such as gold might be having the same effect in driving investor interest in Bitcoin.

Because there is so little definitive information that can be learned from observing the transaction data of a pseudonymous digital currency, speculative theories are plenty in explaining the price rise. Whether or not this is simply greed being stronger than fear at this point is hard to tell. What is known is that rallies of this current magnitude have already occurred for Bitcoin more than a dozen times over the past year-and-a-half.